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Compulsory license
Definition A compulsory license is an authorization by a government for third parties (such as a company or the government itself) for the manufacture or use of a product or intellectual property without the permission of the rightsholder. U.S. copyright law See also Statutory license of musical compositions, Statutory license of sound recordings, and Statutory license of television programming. U.S. patent law The U.S. government effectively enjoys the ability to declare a "compulsory license" to a patent that allows it to use a patented invention without obtaining the permission of the patentee. In turn, the federal government has consented to suit by private patent owners in order to obtain compensation for government uses.Lionel Marks Lavenue, "Patent Infringement Against the United States and Government Contractors Under 28 U.S.C. §1498(a) in the United States Court of Federal Claims," 2 J. of Intell. Prop. Law 389 (1995). Section 1498(a) of Title 28 of the U.S. Code provides in part: Under §1498(a), all patent suits against the U.S. government are litigated in the U.S. Court of Federal Claims.From 1855 through 1982, this tribunal was known as the U.S. Court of Claims, and from 1982-1992 it was named the U.S. Claims Court. The Court of Federal Claims has national jurisdiction, allowing the court to subpoena witnesses and documents anywhere in the United States or its possessions.28 U.S.C. §2521. Court proceedings against the government under §1498(a) are conducted using the same general standards as does litigation between private parties. The patent owner represents itself, while the Attorney General and Department of Justice are responsible for representing the U.S. government in §1498 cases.Id. §516. Unlike private patent suits, however, there are no jury trials in §1498 cases.Id. §2402. Appeals from the United States Court of Claims proceed to the U.S. Court of Appeals for the Federal Circuit.Id. §1295(a)(3). As compared to remedies available in patent infringement suits against private parties, the remedies available in §1498(a) suits are more limited. In private patent litigation, the adjudicated infringer is ordinarily enjoined from using the patented invention throughout the remaining term of the patent.Id. §283. The adjudicated infringer may also have to compensate the patent owner for profits lost due to the infringement.See Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978) (full-text). Additionally, if a court deems the defendant to have been a "willful infringer," the court may order the defendant to pay the patent owner up to three times the actual damages suffered.35 U.S.C. §284. In contrast, §1498(a) limits available remedies to "reasonable and entire compensation" to the patent owner. As a result, the government may not be enjoined from practicing a patented invention. The courts have also generally limited the damages that the government must pay to the patentee to the level of a "reasonable royalty."See Tektronix, Inc. v. United States, 552 F.2d 343 (Ct. Cl. 1977) (F.2d 343 full-text). In some cases, the U.S. government may be obliged to pay the full lost profits of the patentee rather than a reasonable royalty. See Gargoyles, Inc. v. United States, 113 F.3d 1572 (Fed. Cir. 1997) (full-text). However, reportedly the last instance that an award of lost profits was made for government use of a patented invention was in 1930. David M. Schlitz & Richard J. McGrath, "Patent Infringement Claims Against the United States Government," 9 Fed. Cir. Bar J. 351 (2000). A "reasonable royalty" for purposes of patent infringement damages is “the amount that a person desiring to manufacture or use a patented article, as a business proposition, would be willing to pay as a royalty and yet be able to make or use the patented article, in the market at a reasonable profit.”Wright v. United States, 53 Fed. Cl. 466 (2002). Finally, tripled damages for willful infringement are not available against the government.DeGraffenried v. United States, 228 Ct. Cl. 780 (1981). Similar provisions apply to the government's use of copyright28 U.S.C. §1498(b). and mask works.Id. §1498(e). TRIPs agreement Part III of the TRIPS Agreement addresses compulsory licenses. The TRIPS Agreement places some limits upon the ability of WTO member states to award compulsory licenses for the use of a private person’s patented invention. Among the most detailed provisions of the TRIPS Agreement, Article 31 imposes in part the following restrictions upon the issuance of compulsory licenses: * Each application for a compulsory license must be considered on its individual merits. * The proposed user must have made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions and must demonstrate that such efforts have not been successful within a reasonable period of time. However, this requirement may be waived in the case of a national emergency or other circumstances of extreme urgency. * Any such use shall be authorized predominantly for the supply of the domestic market of the member authorizing such use. * The compulsory license must be revocable if and when its motivating circumstances cease to exist and are unlikely to recur. * The patent owner must be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization. * The legal validity of any decision relating to the authorization of such use shall be subject to judicial or other independent review. References Category:Copyright Category:Patent Category:Contract Category:Definition Category:License